Introducing performance-related pay for teachers is “a cut-throat” approach that will “destroy the ethos of schools”, according to a free-school founder singled out for praise by Michael Gove.

Katharine Birbalsingh said performance pay, which will come into effect in September, turns the focus of teachers away from their pupils and on to themselves and could mean “the end of goodwill in schools”.

Ms Birbalsingh, who lost her job after giving a speech to the 2010 Conservative Party conference condemning state education as “broken”, said top private schools “would not touch performance pay with a barge pole” because they knew how it could harm their ethos.

Speaking to TES prior to her talk at the Festival of Education at Wellington College today, she said that, with the exception of jobs such as banking and factory production lines, performance pay “damages organisations”.

She said: “If you are in a factory making toothbrushes, performance-related pay works really well. But when the work has to do with creating team spirit, thinking, developing ideas, it will actually harm your organisation. It makes people think only about the individual and it focuses the mind on the wrong things.

“Heads depend on teachers putting their all in because they love children and putting something in which undermines the love of children into your school, to me, it’s just suicide.”

She said Michael Gove had introduced the change with “good intentions” because it would encourage competition, but that did not mean it would have a positive effect.

Introducing performance-related pay would stop teachers doing things for the good of the school and only do things if they counted towards their targets. A head of department, for example, may not want to help a newly qualified teacher by taking a naughty child into their class, because it could affect her own class’s results, she said.

Other ways of measuring performance, such as extra-curricular contribution, were “really unquantifiable”, she said.

Performance pay would make life in schools more political, with teachers more focused on their bosses seeing what they were doing, rather than what they actually do, she claimed.

She said the system had been introduced as a means of penalising coasting or poorly performing teachers, but it amounted to “a sledgehammer to crack a nut.” The majority worked hard anyway and did the job for the satisfaction of what they could achieve with children, she added.

Ms Birbalsingh, who is the founder and principal of the new Michaela Community School in Brent, opening in September, said she would not be introducing performance pay.

She said: “I absolutely refuse to participate in such a cut-throat way of doing things. This does create a problem when it comes to Ofsted, because it will judge us negatively on this fact, but we won’t be doing it.”

She said her teachers would be paid well and fairly and be rewarded through promotion, increased autonomy and correctly remunerated additional responsibilities.

Bad teachers would be supported and if they failed to live up to expectations, sacked, she said.

Ms Birbalsingh’s tirade against performance-related pay follows research from the social mobility charity the Sutton Trust, which found that resistance to performance pay may be falling among the teaching profession.

Fifty-three per cent of 1,100 teachers surveyed said their pay should be decided by “considering the progress and results of pupils they currently teach” - but  47 per cent said pay should also be based on length of service.

Official government guidance to schools from April 2013 gives them considerable flexibility in how they link pay to teacher performance, suggesting things such as pupil progress, professional development and wider contribution to the work of the school.